Post age 70.5 IRA contribution
Client needs to make a series of systematic withdrawals from her IRA – 3 each @ $3600 so $10,800 total comes out after 3 months. Client is age 70.5 and still working with W2 income. Are there any issues timing or otherwise with making her full $7000 contribution and then doing a $3600 rollover (if within 60 days of receipt of her final distribution) to replace nearly all of the funds? This is all expected to be done in 2021.
Permalink Submitted by Alan - IRA critic on Wed, 2021-07-14 20:35
If client will reach 72 in 2021, any distributions are first applied to her IRA RMD and are not eligible for rollover. If not yet 72 in 2021, there are no RMDs, just the one rollover limitation, so if client has a rollover available, one of the 3600 distributions could be rolled back within 60 days. One final issue is that if the 7000 contribution is deducted, it will reduce any future QCDs up to 7000.